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Approve a 30 year Ground Lease Agreement with Solano Community College for a lease area of 45,875 square feet, for an initial annual rate of $42,277 to allow construction of a parking lot and sewer line improvements on the Nut Tree Airport; and Authorize the County Administrator to execute the agreement and any amendments
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Published Notice Required? Yes ____ No _X _
Public Hearing Required? Yes ____ No _X _
DEPARTMENTAL RECOMMENDATION:
The Department of General Services recommends that the Board of Supervisors:
1. Approve a 30 year Ground Lease Agreement with Solano Community College for a lease area of 45,875 square feet, for an initial annual rate of $42,277 to allow construction of a parking lot and sewer line improvements on the Nut Tree Airport; (Attachment A); and
2. Authorize the County Administrator to execute the agreement and any amendments.
SUMMARY:
Solano Community College, a California public community college, proposes to construct additional improvements including additional vehicle parking and a new sewer line and connection to the Airport’s sewer system. The recommended action includes the approval of a long-term ground lease.
FINANCIAL IMPACT:
Annual rent on the ground lease will start at $42,277 per year and increase annually at a fixed rate of 3% over the term of the lease. The ground lease rate is based on current rates of comparable leases on the Airport and as advertised in Airport development marketing literature. Total rent collected during the first 10-year period of the lease will be $484,659. Over the 30-year lease term, rents collected by the County will total $2,011,348. Rent proceeds will go to the Nut Tree Airport in support of Airport operations and capital improvements.
The costs associated with preparing the agenda item are nominal and absorbed by the department’s FY2020/21 Preliminary Budget.
DISCUSSION:
Development of the parking and sewer line improvements will be funded 100% by Solano Community College. The parking lot is subject to City of Vacaville parking standards. The recommended ground lease is for a 30-year term to allow the lessee to fully utilize and amortize the development costs. The recommended ground lease provides for an option to extend the lease for 10 years and to review the lease rental rate paid to the County. The ground area covered consists of 45,875 square feet.
Classes provided by Solano Community College at this site consist of aeronautic mechanics courses.
The proposed improvements are within an aeronautical development area that is identified by the Nut Tree Airport Master Plan and Airport Business Plan. The project is consistent with implementing actions of the Airport Business Plan aimed at further development of the Airport and generation of revenue to support airport operations and investment.
Solano Community College Governing Board will review and sign the Agreement at their August 19, 2020 meeting.
ALTERNATIVES:
1. The Board could choose not to approve the ground lease agreement. This action is not recommended as the requested lease agreement will enable further hangar development and added revenue for the Airport.
2. The Board could elect to not delegate signing authority to staff. This action is not recommended since delegated authority will enable efficient execution of the ground lease agreement.
OTHER AGENCY INVOLVEMENT:
County Counsel has approved the ground lease contract as to form.
CAO RECOMMENDATION:
APPROVE DEPARTMENTAL RECOMMENDATION